Distributor Q2 Sales Up 5.1%; Confidence Index Soars

CCI Up Sharply To 109.6

Ad specialty industry distributors increased their revenues by 5.1% in the second quarter, a total year-over-year gain of $247 million, according to a report released today by ASI. Also during Q2, the Counselor Confidence Index (CCI) – a measure of distributor health and optimism – rose sharply to 109.6, up seven points from the first-quarter reading.

"Well, certainly over the last 3-4 years, things have continually gotten better," said Mitch Mounger, CEO of Sunrise Identity (asi/339206), which recorded 10% growth in the past quarter. "If I had a Sunrise confidence meter, I would put the number up as high as it's ever been."

The greatest revenue gains in the quarter came from the largest distributors, as has been the pattern in recent reports. Distributors with annual revenues of $10 million or more reported Q2 increased sales of 6.3%, the highest jump of any group. In terms of optimism, more than one-half (58.7%) of all distributors expect an increase in sales in 2013. Among firms that have annual sales of more than $1 million, 69% are now forecasting a rise in revenues this year.

"I think the larger distributors have the capability to invest in technology and tools that help sales professionals better service their clients," said Henrik Johansson, COO for Top 40 distributor Boundless Network (asi/143717), which posted a record quarterly sales gain.

Counting Q2, in which distributor revenues rose to approximately $4.9 billion, industry sales have now increased for 14 straight quarters. During the last five quarters, sales gains have been consistent, with growth rates of between 4.8% and 5.7%. Industry health, meanwhile, as charted by the CCI, is now at its highest level since 2006.